Strategic Benefits Admin Can Save Money by Avoiding Turnover
Consider prioritizing benefits that impact turnover the most.
Your project managers have taken care of absolutely everything they can, from securing backup suppliers to filling up contingency funds — their team's assigned task, however, is still lagging far behind schedule.
In situations like this, the culprit is often voluntary turnover, which leaves HR leaders scrambling to keep their most crucial employees. To that end, business need to consider offering benefits that impact turnover beyond salary alone.
David Weiss, Associate Sales Executive at ADP, notes that inadequate benefits packages tend to contribute to turnover as early as one year into a typical employee's tenure. It's clear that businesses need to use strong benefits administration to keep their most important and talent-centric projects on track, but which benefits should take priority?
What are the Benefits that Impact Turnover the Most?
ADP puts it succinctly in a post on benefits and retention: "In the age of flex time, free coffee loses. It's not just millennials who have changed the expectations of workplace benefits. Employees of all ages have different expectations than in past years." To contextualize this key observation further, the ADP Research Institute (RI) notes in its report, Applying Big Data to the Workforce Turnover Conundrum, that between 60 and 70 percent of turnover is voluntary in the U.S. currently.
As benefits packages have become more scarce in the workforce as whole, they have also become more closely tied to employee decision-making. The benefits that tend to have the greatest impact are those that affect employee freedom. While some workers simply want to maximize the overall value of their compensation package, many others want work to take less time away from their personal lives, according to ADP RI's report, Revelations from Workforce Turnover: A Closer Look Through Predictive Analytics.
Consider, as an example, the possibility of letting employees choose between a bonus or a reduction in hours without a drop in pay. In either case, the business is essentially compensating the worker for hours they did not actually work, but if the latter case is framed as a time-saving option, it can have a positive effect on employee morale while costing the business less. A system that allows workers to leave early if they've finished their work could also serve to point out areas of inefficiency, which may become more apparent once there's free time at stake.
Businesses that fail to see the desired outcomes after changing their offerings should consider bringing in outside observers to determine what benefits their workforce as a whole wants out of their compensation packages.
Communicate Effectively Up and Down the Chain
Once you've determined which benefits are most important to your workers, the next step is convincing the C-suite managers to get on board. Be sure to frame everything in terms of ROI. It's not about the cost of a particular benefits change; it's about the capacity of that change to save money over time. Consider highlighting the fact that businesses with low turnover don't lose crucial team members as often, and onboarding can be an expensive and time-consuming process. In a recent article, ADP detailed how surprised many businesses are when they learn about the significant effects of turnover on their profits.
Communicating directly with the employees under your administration is also a requirement. After all, you're putting all this effort into tailoring benefits packages to what your workers actually want, and you should make sure they know that. If you actively solicit your workers' input and show them that their superiors are listening, they will be more likely to stick around and wait for their benefits packages to align with their expectations. This is a case where your goals and theirs should be mostly in sync, so don't waste the opportunity to lower turnover and build corporate culture simultaneously.
Implementing New Benefits is as Important as Picking Them
Of course, simply deciding to implement a more aggressive benefits package isn't all that needs doing. Implementation is a potentially difficult process that requires expert partners in many cases. And solid communication is just as important during benefits implementation as it is during benefits selection. You'll need feedback on how the roll-out is going, and you should set clear expectations about how new benefits can be used. Benefits that provide increased employee freedom can also contribute to decreased productivity, so your organization will need to remain vigilant to ensure that any hours saved for employees do not become hours lost in terms of production.
In the end, the benefits that convince workers to stay in their positions aren't always the most expensive ones. Getting to know your workforce may even enable you to switch from more costly, undesired offerings to less expensive options that your workforce actually wants. And with the proper amount of forethought and coordination, you can develop smartly targeted benefits packages that retain talent and save your organization money.